Kroo Account - Paying Tax

im_a_robot

Hello,

I am looking at a Kroo current account and it looks like with my balance I will end up creeping over the £1000 personal limit for interest on savings?

Kroo pay interest daily - how the hell am I supposed to pay tax on this - readin ttheir T&C it seems they don't tax the interest themselves?

I welcome advice/pointers - never dealt with tax before.

Thanks, R

TheBanker

You don't need to worry.

Around this time next year, Kroo will send a report to HMRC showing how much interest you earned during this tax year.

HMRC will work out what tax is due, and will normally adjust your tax code to collect it through your payroll next year.

If for some reason HMRC can't collect it through your tax code, they'll send you a letter telling you what you need to do. 

If you are lucky enough to generate over £10,000 in interest in a single tax year, HMRC require you to complete a self assessment return. 

Years ago, banks used to deduct 20% tax from interest, but the rules changed when the Personal Savings Allowance was introduced - now the banks can't deduct the tax because they don't know how much to deduct (because it depends on your other income which they don't know about). 

im_a_robot

Thank you so much.

That is a very helpful reply!

AndyTh_2

Kroo pay interest daily

Kroo actually put in interest daily into your account rather than just accumulate it and pay it monthly? I hate that and was one reason I stopped using Alica bank on Chip before it was a bad rate, just too many transactions.

masonic

AndyTh_2 said:

Kroo pay interest daily

Kroo actually put in interest daily into your account rather than just accumulate it and pay it monthly? I hate that and was one reason I stopped using Alica bank on Chip before it was a bad rate, just too many transactions.

No, they are just showing accrued interest daily. I agree, something like that would put me right off.

boingy

No, it accrues daily like almost every other bank, but they pay it monthly.

im_a_robot

Yeah sorry - I misspoke there. As others have pointed out - it's daily calculated, monthly paid.

My original line of thinking was if I had to self assess (never had to do before) would I need to factor all this in which would be a massive headache to say the least!

boingy

im_a_robot said:

Yeah sorry - I misspoke there. As others have pointed out - it's daily calculated, monthly paid.

My original line of thinking was if I had to self assess (never had to do before) would I need to factor all this in which would be a massive headache to say the least!

Scroll up and read the reply from TheBanker. It will happen automatically through PAYE unless you earn an insane amount of interest. In that case you just request a certificate of interest from each bank and use those numbers for a tax return.

As an aside I'm wondering when HMRC last changed that £10,000 threshold and whether they might consider increasing it given the rising interest rates.

wmb194

im_a_robot said:

Yeah sorry - I misspoke there. As others have pointed out - it's daily calculated, monthly paid.

My original line of thinking was if I had to self assess (never had to do before) would I need to factor all this in which would be a massive headache to say the least!

Adding up the interest you've received isn't difficult - worst case you just scroll through the app. I keep track as I go along and have MS Money spit out an annual tax report.